The following post contains advice from Angi Christensen Harben, the Director of Communications for Georgia Credit Union Affiliates. When she was younger, a credit union stepped in and supported Angi’s finances and life. Now, she enjoys supporting credit unions and spreading the financial wisdom she’s gained.
There’s a reason everyone understands the term “drowning in debt.” The burden of debt can truly make you feel as if you can’t breathe sometimes. And if you’re like millions of your fellow Americans, you are in over your head with seemingly no good options to get out from under your personal debt. I’m not talking about a mortgage on a house that shelters your family or a car payment on the vehicle that takes you to work so you can earn the money to pay the mortgage on a house that shelters your family.
I’m mostly talking about credit card debt. Throw in medical bills, personal loans and high interest rates, and pretty soon it can be hard to get a breath.
There are ways to right the ship. Talk to your credit union and take advantage of their financial literacy programs. Check out a book at the library on how to become debt free. Make an appointment to see a non-profit consumer credit counselor. Move in with your parents on the cheap so you can use your salary to pay down your debt. Some of these options are more appealing than others.
As you’re seeking ways to make your situation better, keep this list in mind of things NOT to do. Sometimes what seems like a good idea at the time will actually hinder you instead of helping you climb to higher ground.
Don’t pay only the minimum amount due each month on your credit cards. It might keep more cash in your wallet in the short term, but in the long run it will cause your debt to increase.
Don’t look to friends and family to rescue you. You want good relationships with the important people in your life, and owing someone money can put stress on that relationship. You’ll benefit from their support and encouragement as you try to get things under control, so handle it without their financial assistance.
Don’t take on new debt to service old debt. You can’t borrow your way out of debt. No matter how great it sounds on those TV commercials to have a wad of cash in your bank account tomorrow, the interest rate could kill your plans to get your head above water.
Don’t give up. There are debt relief options to explore before considering bankruptcy.
Don’t go in blind. When comparing your options, make sure you understand exactly how much each option could save you, or cost you, and how your credit could be affected.